Planning a Renovation: Setting a Budget

When planning any renovation, it is important to be organized. Budgeting is key so that there are no surprises.

Consider the costs - establish a budget figure. The most important thing is to decide how much you can afford to spend. Working from this figure, you can determine what kind of project to undertake. While this is difficult to do if you are unfamiliar with renovation costs, ball park figures can be obtained from contractors and from neighbors and friends who have had similar work done. It is important to include all the costs involved. A major project may even mean you have to move out of the house for a period of time, so you'd have to consider the cost of relocation, hotel, or apartment expenses for a short time. Also consider any interest charges on money borrowed, or the opportunity cost lost on moneys spent. Include building permit fees, fees required to have plans drawn up, insurance costs, property taxes, the fee for a survey of the property, any demolition costs, and storage costs for items such as furniture.

It is wise to leave a contingency for the unexpected. There are very few projects which come in under budget, and not a great many more that make it exactly on budget. Further, because you are dealing with an existing structure, there is usually some difficulty in matching new work to old. Additional costs sometimes become necessary when old wall finishes are torn down and deteriorated conditions are found inside. We recommend that a five percent slush fund be established.

Budgeting should not only be done with money, but with time as well. Particularly if you are interested in doing some of the work yourself, you must be realistic and determine exactly how much time you have to work on the project. Putting in a full day's work, then coming home to a do-it-yourself project while keeping a family together and maintaining any kind of a social life is a tall order. There are many " six-week projects" that are still underway two years after the starting date.

Even if the work is not to be done by the home owner, the project can be quite lengthy. For example, to add a second story to a bungalow, professionals will require at least three months to complete the project. This assumes a smooth work flow with no interruptions due to weather, supply problems, strikes, et cetera.

Having set some sort of realistic budget figure and having left a contingency, you must find a way to mesh the master plan with the budget. Unless you have considerable experience and confidence in your ability to estimate the cost of the project. it is wise to get some outside help.

-Sourced from Sears Manage My Home

Stay tuned for part IV in the Series: The Design Stage

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